Lipsome-based sustained delivery system for i.m. injection of water-soluble antibiotics (gentamicin sulphate) is proposed. Technical feasibility, improved pharmacokinetics, biodegradation of the carrier and absence of local irritation were demonstrated in Phase I. In order to provide a basis for product development and clinical trials in Phase III, the objectives of Phase II include: formulation of a pharmaceutically acceptable dosage form, pre-clinical efficacy and safety evaluation, in vitro-in vivo correlation, pilot batch production, stability testing. Three dosage forms covering a wide range of drug input rates will be formulated. The relative nephrotoxicity of liposomal versus free gentamicin will be assessed in rats. Efficacy will be tested in salmonella infected mice. A lyophilized dosage form will be formulated to improve the product shelf-life. A new homogenization technique, microfluidization, will be employed for batch production. In vitro release profiles will be established with a flow-through dialysis device. Three pilot batches will be prepared and undergo extensive stability testing. Preliminary product specifications, standard operating procedures and documentation will be provided. Following Phase II, product development of a non-toxic biodegradable depot carrier for gentamicin or other aminoglycoside derivatives and extension of the program to other injectable, water-soluble drugs is planned.